Chinese retailer acquires South Korean-owned stores
November 28, 2011 Category Retail, Weekly
Chinese retailers who braced themselves a decade ago for an influx of competitors, such as Carrefour and Walmart, have matched, and in some cases, even outclassed their international rivals. Fujian-based retailer New Hua Du Supercenter announced it would acquire six stores run by E-Mart, South Korea’s biggest supermarket chain, for CNY125 million. The stores are in Jiangsu and Zhejiang provinces. The deal – the first buyout by a Chinese retailer of a foreign-invested supermarket in China – will see another Fujian company, Yonghui Superstores, buy E-Mart’s only store in Beijing, pending shareholder approval. China opened its retail industry to foreign competitors in 1995, allowing them to form joint ventures with Chinese companies. Restrictions were further eased in 2001, when the country joined the World Trade Organization (WTO). Under the WTO deal, China agreed to remove all limits on shareholding, shop numbers, and shop locations for foreign players by 2005. Almost all of the world’s top retailers have since opened for business in China. By last August, hypermarket giant Walmart had 189 outlets in China; while its major rival Carrefour had more than 180. Other global players with a China presence include Taiwan-based RT-Mart, Tesco of Britain, Metro of Germany, the CP-Lotus hypermarket chain operated by Thailand’s Chia Tai Group, Aeon of Japan, and French retailer Auchan. Foreign companies dominated the hypermarket sector in China, with more than half of the market, but local retailers led in terms of mid-sized supermarkets and convenient stores, which are particularly popular in second- and third-tier cities, the South China Morning Post reports.
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